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UK Government Consults on New Rules to Cut Broadband Rollout Costs

Tuesday, December 1st, 2015 (10:35 am) - Score 946

Last year Europe adopted new rules that are designed to make it both “easier and cheaper” to roll-out ultrafast broadband networks, which included a voluntary “High-Speed Broadband Ready” label for new build homes. Today a new consultation has been launch on UK implementation of the rules.

The idea behind the new EU Broadband Cost Reduction Directive is that civil works (e.g. digging up roads) can account for the lion’s share of development costs (sometimes as much as 80%), but it’s hoped that the new package will help to reduce this by around 20-30%.

As such the directive covers various areas, such as infrastructure sharing, rights of access to existing infrastructure, information sharing, coordination of civil engineering works, permit granting, dispute resolution and many other related changes. See our 2014 summary for a simple low-down on what all of this means (here).

The Directive’s 5 Key Pillars

Pillar 1 – Infrastructure sharing: Requires existing network infrastructure owners (gas, electricity, rail, highways, roads, waste water and sewerage) to give high-speed internet providers access to and information about relevant existing physical infrastructure at a fair and reasonable price (Articles 3 & 4)

Pillar 2 – Coordination of civil works: Requires infrastructure owners provide information and coordinate planned civil works (Articles 5 & 6)

Pillar 3 – Efficient Permits Mechanism: Streamlines permit granting for civil works (Article 7)

Pillar 4 – In-building infrastructure: Requires new buildings and major building refurbishments to be equipped with high-speed internet-ready in-building infrastructure (Articles 8 and 9)

Pillar 5 – Administration of the Directive: Proposes setting up a “Competent Body” to deal with disputes and penalties (Article 10-12)

The directive means that member states, such as the United Kingdom, must adopt national provisions to comply with the new directive by 1st January 2016 and they must then be enforced from 1st July 2016.

However the UK has already adopted many of the measures through existing legislation and Ofcom regulation (e.g. the Growth and Infrastructure Act 2013 and BT’s imperfect Physical Infrastructure Access solution), which means that on the surface it won’t have a huge impact.

Extract from the DCMS Impact Assessment

In the UK many of these barriers are far less influential or problematic. Market based infrastructure sharing agreements already exist where there is a solution that is economically attractive to both sides. There have also been extensive trials to explore options for further sharing, for example Virgin Media’s trials using electricity poles to carry fibre cables in Wales.

The measures in the Directive do not materially change the incentives to make such a sharing agreement in the UK as they may do in other EU countries. Where it is economically attractive for both sides to share the market will deliver this activity, and that will continue to happen once the Directive comes into force. The Directive simply provides a regulatory underpinning to activity that already exists and will continue to exist in the future.

It appears unlikely that the Directive will lead to a significant change in the level of successful infrastructure sharing activity. The Department therefore aims to implement the Directive in a way that protects firms’ investment incentives. Should the Directive lead to additional infrastructure sharing, it must be on terms that are fair and reasonable to both parties.

However it’s worth pointing out that the United Kingdom doesn’t really have a firmly defined policy for pushing superfast broadband into new build homes, even though the Government has attempted to push Local Authorities towards adopting a tougher stance on the matter as part of planning approval (here).

In the above sense the new rules do set a clearer guideline, even though it’s all still a bit flaky and largely unenforced. Crucially this aspect (Article 8) is being handled separately by the Department for Communities and Local Government (DCLG).

Installation of high-speed ready in-building physical infrastructure

Article 8 Of the Directive Sets out minimum requirements for in-building physical infrastructure to support high-speed communications networks in all new buildings and major renovations where a building permit application has been made after 31st December 2016.

The Department for Communities and Local Government (DCLG) is implementing that requirement in England through amendment to the building regulations and it is therefore not considered within this consultation. Building Regulations are a devolved matter in Scotland, Wales, And Northern Ireland; The devolved administrations are managing their own public consultations on the requirements of Article 8.

The consultation can be found online (here) and the closing date for responses is at 11:45pm on 25th January 2016. The Government should have very little trouble meeting the EU’s deadline for implementation, although it will be interesting to see how many developers are prepared, particularly those that are attempting to build in rural areas where broadband upgrades may not yet have reached. It’s not always enough to merely rely on BTOpenreach to deliver the goods.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
6 Responses
  1. Avatar Bob says:

    OFCOM has now sent out the clearest message to date that Openreach will be separated from the main BT Group

    http://www.bbc.co.uk/news/business-34972638

    1. Mark Jackson Mark Jackson says:

      Not really, it’s the usual non-committal waffle that we’ve seen before. All she’s saying is what we already know, that Ofcom will make changes.. but we knew that. The likely outcome is a half-way solution rather than full separation, but the BBC doesn’t really lend any new weight one way or the other in that debate.

      As usual it’s a case of having to wade through PR and political language, with Ofcom wanting to be seen as more pro-consumer. But the proof will come next year.

  2. Avatar BreakUpBT says:

    Would Sky be allowed to own Openreach? TalkTalk? Absolutely not!

    Openreach service is terrible yet every year they somehow find £2 billion a year in hard cash to hand to BT shareholders.

    I get 0.5 Mbps in a town of 20,000 people, yet supposedly our street can get FTTC Fibre broadband. No we can’t!

    It makes you really angry when BT claim we can get it and then when you call them they tell you not to bother because the actual speed of the 80 Mbps package would be 1 Mbps. Will they do anything to fix it? Of course not!

    And we’ve been paying for 8Mbps then 24Mbps for 13 years!

    BT must be broken up!

    1. Avatar Steve Jones says:

      The amount paid to shareholders in dividends is was a little over £900m, not £2bn, and that’s from the entire company not just the OR part (which is less than a third of turnover). It may have escaped your attention that companies are owned by people and institutions who have a not unreasonable expectation on some return on the money they’ve invested in a company. The same will hold true whether BT is split up or not. Openreach will have shareholders. After all, you don’t see VM rushing to invest in areas where they expect to make a loss.

      Investment follows when there’s a reasonable chance of a rate of return, and that is the case whatever company owns the assets.

    2. Avatar GNewton says:

      @SteveJones: While I agree with you in principle, in the case of Openreach and BT it’s a slightly different situation. BT has serious issues in even offering basic telecom services, let alone competitive fibre services, its customer service is one of the worst you can think of (see Trustpilot or ISPReview or BTs own bussiness forum to get an idea). This is in part a result of a long standing near-monopoly situation, and in part because of simple incompetence and lack of long term vision. These are some of the reasons why Openreach ought to become an independent company, and the remainder BT should then become more deregulated. Even Ofcom knows that some serious changes are due with BT.

    3. Have to admit I fail to see why so many people seem to think that the mere action of breaking Openreach free from BT will suddenly make Openreach a wonderful, customer focused, innovative company. 🙂

      It will still be a monopoly provider in much of its area of operations and will still have the same staff as it does now (TUPE will see to that). There will still be little or no financial incentive for them to rip out all of the copper, since the average Joe will not want to pay more for their broadband service.

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